Governor Andy Beshear announced Tuesday that Kentucky has joined 19 states and the District of Columbia in a lawsuit challenging the Trump administration’s move to end federal housing support that state officials say will sharply increase homelessness.
The lawsuit targets new U.S. Department of Housing and Urban Development (HUD) rules that would cut more than $15 million in federal housing funds in Kentucky. State officials say the changes could push 700 households back into homelessness and put another 1,200 Kentuckians at risk of losing stable housing.
Beshear said the policy shift would lead to more veterans, families and vulnerable individuals living on the streets and argued the administration should be helping people rebuild—not creating barriers. He called the changes dangerous and harmful to public safety.
The legal challenge focuses on proposed revisions to HUD’s Continuum of Care (CoC) program, which funds services for seniors, families with children, domestic violence survivors, veterans and people with disabilities. The new rules would limit states to receiving no more than 30% of their CoC funding for permanent supportive housing and require states to reapply for money already awarded by Congress in 2024.
Without the revisions, Kentucky expected more than $21 million in CoC funding. With the cap, the state would lose 70% of the $15 million directed toward permanent supportive housing in 118 counties, along with more than $20 million in additional federal support for rental and homelessness services.
Eight existing grants now fund Permanent Supportive Housing programs serving about 324 Kentuckians, including domestic violence survivors and individuals with disabilities.
Amanda Couch, CEO of Welcome House Inc. in Northern Kentucky, said losing the grants would eliminate essential housing programs that rural communities depend on. She said her organization has already served hundreds of adults and children this year through nearly $2.4 million in grants that stabilize families in crisis. Couch warned that ending the funding would push many households back into homelessness and strip communities of programs proven to lower long-term costs and improve outcomes.
State officials say none of the new requirements were approved by Congress and contradict earlier HUD guidance.
States joining the lawsuit include Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia.
